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1. Nonprofit Groups Draw a Line at Some Donors   Jan 28, 2007 New York Times   Article quotes IS president and CEO, Diana Aviv. Also mentions IS members, the American Diabetes Association, and the American Heart Association. Doctors Without Borders, a French medical charity, has long practiced an unusual form of discipline that may cause other nonprofits to squirm. “It’s a very thorny subject,” said Diana Aviv, president and chief executive of the Independent Sector, a trade association representing about 550 nonprofit organizations. “We’re a nonprofit, and we have drawn the line, for instance, with some foundations that are clearly aligned with a political position,” he said.   2. Charities Love IRA Rollovers: Groups Push for Permanent Expansion of New Law   Jan 27, 2007 The Wall Street Journal   Article mentions Independent Sector, and IS member, the Council for Advancement and Support of Education. Charitable individual-retirement-account rollovers look to be on a roll. A new provision that allows seniors to give as much as $100,000 tax-free to charity from an IRA has proven popular since it was introduced as part of the Pension Protection Act last August.   3. Melinda Gates Taking Key Public Role With Foundation   Jan 28, 2007 RedOrbit   Article mentions IS member, the Gates Foundation. She and her husband share top billing at the world's richest foundation, but Bill Gates always dominated the spotlight -- until this year. But what was happening because I wasn't out talking about what I was doing, or what we were doing, is people started naturally to think, well this is Bill's foundation. Even though the Gates foundation is the world's largest, it still accounts for less than 1 percent of American giving, she said.   4. Turning a blind eye, IRS enables church politicking   Jan 29, 2007 USA Today   Opinion piece A 1954 law forbids partisan political activity that aims to help, or hurt, candidates for public office. Such behavior would put a church’s tax-exempt status in jeopardy — if the government chose to enforce the law.   5. Philanthropy's New Math   Feb 2, 2007 Chronicle of Higher Education   Article mentions Independent Sector, and IS members, the Center on Philanthropy at Indiana University, the Council on Foundations, and the Foundation Center. How much will they change the philanthropic sector we have come to know over the last 100 years? Fund, with $553,365,428). There is, then, serious money in the foundation sector. There is a great deal that is new in the sector, but the underlying patterns have been consistent.   6. What's the Big Idea?   Feb 2, 2007 Chronicle of Higher Education   Such donations vary in amount, depending on the size of the college, but they are generally considered to be gifts of $1-million or more. Although the Eduventures survey shows that 31 percent of successful lead-donation ideas came from donors themselves, Ms. One of the more unusual and profitable donations came in 2005 from Pierre Omidyar, a Tufts alumnus and co-founder and chief executive of eBay, and his wife Pam.   7. In Katrina's Wake: Where Is the Money? Congress authorized billions to rebuild, but only half has been spent. Worrying about fraud   Jan 27, 2007 The Wall Street Journal   In August, 2005, Hurricane Katrina flattened two bridges, one for cars, one for trains, that span the two miles of water separating this city of 8,000 from the town of Pass Christian. Sixteen months later, the automobile bridge remains little more than pilings. The railroad bridge is busy with trains.   8. As Aid Lags, Volunteers Shoulder Rebuilding on Gulf Coast   Jan 28, 2007 Washington Post   Under its guidelines, families of low and moderate income will be eligible for as much as $100,000, less any insurance and FEMA rebuilding payments they have received. In the meantime, not knowing whether they will receive aid, many families here say they have accepted, sometimes reluctantly, the help of the charity groups in the rebuilding.   9. Bringing Health Care To Katrina's Uninsured   Jan 29, 2007 Washington Post   Bundled up against the chilly wind, people began arriving at 2 a.m. outside the tents and doublewide trailers offering free care in eastern New Orleans. More than 400 health-care workers have volunteered for the health fair, including doctors, dentists and specialists. Services include free prescriptions; dental fillings and teeth cleanings; eye exams and glasses; and specialized care, including pediatrics, obstetrics and gynecology, diabetic care and cardiology.   10. Pelosi, two other Democrats failed to disclose roles in family charities   Jan 29, 2007 USA Today   Evan Bayh of Indiana also did not report they serve as family foundation directors, according to financial disclosure reports examined by USA TODAY. Bayh spokeswoman Meghan Keck said it was "simply an oversight" that he did not disclose his charity role. Last year, then-Senate Majority Leader Bill Frist failed to report his role in a family charity.   11. Phelps's Prize   Jan 29, 2007 The Wall Street Journal   Opinion piece by Carl Schramm of IS member, the Kauffman Foundation. The Nobel Prize lectures given last month by the economics and the peace laureates strikingly emphasized entrepreneurship. But the kinds of entrepreneurship espoused by the laureates are profoundly different.   Other Headlines 12. Nonprofit salaries diverge on gender   Jan 27, 2007 Pittsburgh Tribune Review   The study, by Robert Morris University's Bayer Center for Nonprofit Management and the United Way of Allegheny County, was meant to help nonprofit managers set salaries for their employees. Nonprofits make up as much as 10 percent of the region's economy, Outon said. Kennard Wing, a private consultant for nonprofits, who lives in Haverton, Delaware County, said it's a mistake for nonprofits to cut payroll and other costs just to reduce their overhead expenses.   1. Nonprofit Groups Draw a Line at Some Donors   Jan 28, 2007 New York Times   STEPHANIE STROM In the wake of the 2004 tsunami that devastated shorelines around the Indian Ocean, the relief group Doctors Without Borders won plaudits for its decision to halt fund-raising for the disaster once it had collected enough donations to accomplish the mission it had set for itself. Other relief organizations raised as much as they could and consequently faced criticism from French and British regulators and others for being unable to spend all of it expediently. Doctors Without Borders, a French medical charity, has long practiced an unusual form of discipline that may cause other nonprofits to squirm. For more than a decade, it has politely declined financial support from corporations whose activities conflict with its mission and principles, recently adding some medical device makers and biotechnology companies. It even declines money such companies make to match donations from their employees. “We’re not making moral judgments,” said Alyssa Herman, director of development at the organization’s New York affiliate. “The policy is really an effort to avoid potential conflicts or barriers to our mission.” Nonprofit circles have been buzzing lately over a two-part series in The Los Angeles Times highlighting conflicts between the goals of the Gates Foundation and the activities of some companies in which it invests. Foundations and charities have long confronted such questions. A few years ago, some museums and other organizations were fighting questions over their acceptance of donations made by corporate leaders tainted by scandals, like L. Dennis Kozlowski, the Tyco International executive who gave millions to the Whitney Museum of American Art, and Kenneth L. Lay, the Enron founder, whose name adorned facilities and programs in Houston and Aspen, Colo. Doctors Without Borders is not alone, though its policy may be the most stringent. Last year, the American Diabetes Association adopted a tougher policy to govern its relationship with food and drug companies, and many charities prohibit the acceptance of gifts from tobacco companies and their subsidiaries. Critics note, though, that beyond tobacco, such policies are usually nuanced. The American Heart Association, for instance, does not allow wine and alcohol companies to use its brand for marketing and image-building purposes, but it will accept money raised on its behalf through wine auctions and tastings. Similarly, it does not allow the use of its name or logo by candy and chocolate makers but will accept money from them “as long as no strings are attached,” said David Livingston, the heart association’s corporate secretary and counsel. About 18 percent of the association’s revenues in the year that ended June 30, 2006, came from companies, compared with about 7 percent of the $122 million the American unit of Doctors Without Borders raised in 2005. “Corporations are not per se bad,” Mr. Livingston said. “They have different interests than we do, but where our interests overlap and where doing so would not have an impact on our integrity and credibility, we think it’s appropriate to work with them on behalf of what we do.” As the number of charities rises at a much faster pace than giving, it is difficult for any nonprofit group to look a gift horse in the mouth. “It’s a very thorny subject,” said Diana Aviv, president and chief executive of the Independent Sector, a trade association representing about 550 nonprofit organizations. “Where do you draw the line? Some of our largest foundations were created by individuals who have been described as robber barons. Should charities look askance at that money?” Rushworth M. Kidder, president of the Institute for Global Ethics, said he did not think a blanket prohibition on gifts from corporations was necessary but that charities should be thinking more about the issue. “We’re a nonprofit, and we have drawn the line, for instance, with some foundations that are clearly aligned with a political position,” he said. “We’re here to help people understand how to think, not what to think, and to the extent that people see us as coming from a particular position because of the money we receive, it dilutes out mission.” The Doctors Without Borders policy has existed informally since the early 1990s, Ms. Herman said, and was formally approved by the board later that decade. The organization does not solicit or accept funds from any companies or their foundations that derive income from tobacco, alcohol, weapons, pharmaceuticals, medical equipment, biotechnology, oil, mineral, gas and other extractive industries, like diamond mining. “To take money from an economic entity whose influence goes beyond the economic to influence politics and government in the areas where we work could complicate the negotiations we have with governments, rebel groups and others,” said Nicolas de Torrenté, executive director of the Doctors Without Borders affiliate in the United States. Mr. de Torrenté noted, for example, the far-reaching influence of diamond mining in Western Africa, and of the oil industry in Nigeria and Sudan. “You’ll often hear of oil companies trying to set up clinics, but we are there just to do humanitarian work, not to promote or help anyone with their image,” Mr. de Torrenté said.   return to the top 2. Charities Love IRA Rollovers: Groups Push for Permanent Expansion of New Law   Jan 27, 2007 The Wall Street Journal   By ARDEN DALE Charitable individual-retirement-account rollovers look to be on a roll. A new provision that allows seniors to give as much as $100,000 tax-free to charity from an IRA has proven popular since it was introduced as part of the Pension Protection Act last August. Seniors have until the end of the year to take advantage of a new way to make charitable gifts: People 70½ or older can roll over up to $100,000 a year from their IRAs to charities, but the provision expires at the end of 2007. Charities report a slew of new donations from IRAs since the provision was signed into law in August. Some nonprofit groups are pushing to make the provision permanent and extend its reach. Though permitted only in 2006 and 2007, the IRA rollovers -- which are available to people 70½ and older -- could become much more widely used. That would happen if a bill that makes them permanent and lifts limits on the size and kind of contributions they fund becomes law. Charitable groups are banding together to work on legislation. The provision has elicited a strong response from donors around the country, according to Tanya Howe Johnson, president and chief executive of the National Committee on Planned Giving, a professional group for charitable-gift planners. According to the NCPG, at least $25 million has been given through the rollovers in the few months since they were authorized. "We think that's probably just a small fraction of what's actually been given," says Ms. Johnson. Here's how the charitable IRA rollover works: Instead of withdrawing money and reporting it as taxable income, a donor transfers the gift directly to charity and circumvents the tax bite. Gifts must go directly to charity, rather than to a donor-advised fund or a trust. Harvard University says it has received more than 150 gifts totaling more than $2.5 million in the months since the law put the rollovers into place. These gifts have ranged in size from $100 to $100,000; 11 were for the maximum $100,000. "This legislation has been terrific for Harvard and our donors," says Anne D. McClintock, executive director of University Planned Giving at Harvard. One donor even used the rollover to create a fund for research assistants at the university. Harriett Eckstein, the widow of former Harvard Prof. Otto Eckstein, set up the Harriett Eckstein Fund for Research Support of the Otto Eckstein Professorship in Applied Economics. Ms. Eckstein had intended to set up the research fund through a bequest, but the "IRA legislation enabled her to make her gift now and derive tremendous satisfaction from accomplishing this objective, which meant so much to her husband," says Ms. McClintock. Charities have pushed hard over the years for the tax break, which is known technically as a "charitable transfer," and is the first legislation that expressly permits tax-free gifts from IRA accounts during the lifetime of the owner. Now, groups including the NCPG, the American Council on Gift Annuities, the Association of Fundraising Professionals, the Council for Advancement and Support of Education, and Independent Sector are working on legislation that would make the rollovers permanent, remove contribution limits and allow donors to give money through trusts and donor-advised funds, says Ms. Johnson. A spokesman for Sen. Byron L. Dorgan (D., N.D.) says "it's very likely" that the senator will introduce legislation this session that would make the charitable rollover permanent and widen out its provisions. "I think it's important for charitable organizations to pull together to inform Congress that this is a good thing," says Maj. Todd Hawks, national public-affairs secretary for the Salvation Army. Conrad Teitell, head of the charitable planning group at the Stamford, Conn., office of law firm Cummings & Lockwood LLC, is now working with a small ad hoc group known as the Rollover Rangers to convince Congress to pass an expanded version of the rollover provision. Mr. Teitell wants to allow rollovers to trusts, including unit trusts, annuity trusts and pooled income funds. In some cases, the trusts would pay back an income stream to the donor. This would make donations possible by people who want to give now, but can't afford to part with their assets, says Mr. Teitell. Donors have been interested in the rollovers since long before they were allowed. At Harvard, for example, donors have been asking the university "with increasing frequency over the last decade" about gifts from IRAs, according to Ms. McClintock. Charity watchers say the rollovers aren't likely to stimulate people who had no intention of giving in the first place. Donors who already have a relationship with an organization will be most likely to take advantage, says Sandra Miniutti, vice president of marketing at Charity Navigator, which evaluates charities. "All the research shows that people don't give because of the tax consequences," says Ms. Johnson. "The No. 1 reason is the relationship with the charity. This opens up a giving option that wasn't available before."   return to the top 3. Melinda Gates Taking Key Public Role With Foundation   Jan 28, 2007 RedOrbit   Edith M. Lederer Associated Press DAVOS, Switzerland -- Melinda Gates has traveled the world with her husband, meeting with the rich and powerful and visiting its poorest in remote African villages. She and her husband share top billing at the world's richest foundation, but Bill Gates always dominated the spotlight -- until this year. Taking the stage at this week's World Economic Forum for the first time, Melinda addressed health, development and women's issues before a VIP audience. Sitting in a comfortable chair beside her husband for an informal conversation over breakfast Saturday, Melinda told about 200 invited guests that she chose a more public role so people would realize that the Bill & Melinda Gates Foundation is definitely a his and hers operation. Melinda was managing several Microsoft units when she met the Microsoft founder and chairman at a press event in New York for the computer powerhouse in 1987. The Dallas native with an MBA from Duke and the Harvard dropout from Seattle married on New Year's Day 1994 when he was already the world's richest man and quickly began a family. Melinda said she decided to keep a low profile because she wanted to be with her children who are still very young -- Jennifer, 10, Rory, 7, and Phoebe, 4. "We're both very, very engaged parents," she said. After Phoebe celebrated her first birthday, Melinda said, "I felt like, OK, now's the time." "I was seeing so much in the developing world. But what was happening because I wasn't out talking about what I was doing, or what we were doing, is people started naturally to think, well this is Bill's foundation. And that couldn't have been further from the truth," Melinda said. "And both of us felt that it was very important that people understood that this is a joint effort -- the two of us are absolutely moving it forward as a couple. And so getting that out, and letting people know that we both cared about it is one reason," she said. In 2005, she started speaking about the work of the foundation -- which has a $32 billion endowment, including $1.6 billion from billionaire U.S. investment wizard Warren Buffett -- according to the foundation's Web site. Melinda said she was especially moved by the burden that falls on women in the developing world, who are called on to deal not only with the daily struggle of feeding their families but with sickness, death and other emergencies. "I felt like I was seeing too much not to speak out ... to give voice to the voiceless," she said. She said 60 percent of AIDS sufferers in Africa today are women, a shift in the past decade. The Gates foundation, which is funding research for an AIDS vaccine, is also working on pills and microbicide gels likely to be available sooner that women could take without informing their sex partners so they have the power to prevent AIDS, she said. In a speech Thursday, she said that despite many programs to fight poverty and disease in the developing world, "millions of children still die every year of diseases we can prevent easily and cheaply. And more than 1 billion people live on less than a dollar a day, suffer from chronic hunger and don't have enough clean water to cook with or drink. "By contrast, each of us in this room had the chance to grow up healthy, get a good education and live our dreams," she said. "Bill and I started our foundation because we believe that people living in extreme poverty and dying of preventable diseases deserve the same chance we all had: the chance to make the most of their lives." She stressed, however, that government leaders must recognize that the private sector cannot solve complex problems like poverty and disease without their support. Even though the Gates foundation is the world's largest, it still accounts for less than 1 percent of American giving, she said. And its $32 billion would barely cover the gap between the need for health services in the developing world and the funds available for one year, she said. The 42-year-old said another reason for speaking out now was "to say to my daughters that I want them to be powerful, strong women going forward." (c) 2007 Deseret News (Salt Lake City). Provided by ProQuest Information and Learning. All rights Reserved.   return to the top 4. Turning a blind eye, IRS enables church politicking   Jan 29, 2007 USA Today   By Dan Gilgoff Last year was supposed to spell doom for sermons that endorsed political candidates or parties. Months before the congressional elections, the IRS made front-page headlines by trumpeting a new effort to crack down on churches that violated IRS restrictions on politicking by houses of worship. The offensive was framed as a reaction to the 2004 election cycle, when a growing number of churches were seen to be engaging in prohibited political activism — such as pulpit endorsements — with impunity. It may come as a surprise, then, that when the IRS releases its tally of complaints against church politicking in the '06 election — anticipated in the next month or so — the number is expected to be even higher than it was in 2004. But that should be no surprise at all. Fact is, the IRS has never seriously enforced the 1954 law that forbids churches to aid candidates for elected office. (It has been amended to ban opposing political candidates as well.) The agency defends its record by noting that churches enjoy special legal protections that prevent the IRS from proactively monitoring them for violations. According to IRS spokeswoman Nancy Mathis, the agency cannot launch an investigation into a church unless it receives a complaint from a parishioner or an independent watchdog group. "It's not like we're sitting in the pews," says Mathis. "It's the honor system plus some third-party oversight." IRS experts outside the agency say a bigger stumbling block to enforcement is the American cultural taboo against government intrusion into churches. Mathis estimates that only about five churches have ever lost their tax-exempt status by violating the rule. That's one church for each decade the law has been on the books. Subsidized partisanship This enforcement vacuum is aggravating the very problem that Congress set out to fix in 1954: preventing Uncle Sam from subsidizing partisan politics. Political consultants, scholars and news reports all confirm that, with each passing election, more churches — both liberal and conservative — appear to be pushing the envelope in endorsing or opposing candidates. These churches typically argue that they are advocating issues, such as opposition to gay marriage or the war in Iraq — perfectly legal under IRS rules — as opposed to specific candidates. The law banning tax-exempt organizations, which include churches, from partisan politics was engineered by then-Senate Minority Leader Lyndon B. Johnson. Its detractors, mostly Christian conservatives, have argued that Johnson was seeking retribution against a non-profit group opposed to his re-election. While there is some truth to that claim — Johnson's language was attached to another, unrelated bill as an amendment with reportedly little or no debate — the law has been upheld by the courts. And even before its passage, the U.S. government had long tailored tax exemptions to charities that confronted problems such as poverty because such groups provided a clear benefit to the public and saved the federal government time and money. That's why American taxpayers should be concerned about the IRS enforcement vacuum: Tax exemptions for non-profit groups were never intended to offer tax relief to partisan political advocacy. By failing to enforce the 1954 rule, however, that's exactly what the IRS is doing. The agency has concluded investigations into complaints filed against 40 churches in the 2004 election cycle. Though so-called "political intervention" (IRS-speak for actions that violate its prohibitions on backing or opposing candidates) was substantiated in all but three cases, not a single house of worship saw its tax-exempt status revoked. Instead, the IRS wrote advisories, warning citations that carry no punishment, or assessed excise taxes, the equivalent of light fines, on those churches. The IRS justifies this slap-on-the-wrist approach by claiming that it wants to bring churches into compliance with IRS rules rather than punish them. But because federal law prevents publication of a list of such churches and their violations, there is no example for other churches to follow concerning what kinds of political activity go too far. The IRS does periodically issue guidelines for churches, but those receive much less attention than would a newspaper story about a church that crossed the line. David Barton, an evangelical activist who was hired by the Republican National Committee to reach thousands of pastors in the 2004 campaign, says he hasn't heard of a single church losing its tax-exempt status in his nearly 20 years of political activism. If he hasn't, who has? Both sides of the pulpit Of course, it's not just conservative evangelical churches backing Republican candidates that flout the IRS rule without consequence. Most of us have become familiar with the sight of Democratic candidates addressing liberal African-American congregations from the pulpit after being introduced by a pastor who is clearly making an endorsement. And All Saints Episcopal Church in Pasadena, Calif., has attracted national scrutiny because it is the subject of an IRS investigation triggered when a pastor there delivered an anti-Iraq war sermon that appeared to support Democratic presidential nominee John Kerry on the eve of the 2004 election. If history is any guide, All Saints has little reason to fear revocation of its tax-free status. And if the church's legal team is right, the case will turn out to be another instance of a partisan group — this time on the right — trying to harass a church with which it disagrees politically. Indeed, with the IRS claiming it can launch investigations into churches only in response to complaints filed by parishioners or outsiders, the enforcement of a law intended to stamp out partisan politics in churches has become the province of partisan political organizations looking to make trouble for their churchgoing enemies. In an interesting twist, though, many Christian right activists have taken up the liberal All Saints' cause, vowing to fight any IRS attempt to revoke the church's tax-exempt status. A strange marriage, to be sure, but churches on both left and right have much to gain by pressuring the IRS to continue ignoring its own rule. And as long as the agency does, partisans on both sides will continue filling the vacuum with complaints. Dan Gilgoff is a senior editor at U.S. News & World Report. His book, The Jesus Machine: How James Dobson, Focus on the Family, and Evangelical America are Winning the Culture War, will be published in March. Crossing the line? Here's a sampling of churches that are the subjects of complaints filed with the IRS: All Saints Episcopal Church, Pasadena, Calif.: Currently the target of an IRS investigation triggered by a 2004 anti-Iraq war sermon. The sermon, delivered by former church rector Rev. George Regas two days before the election, imagined a debate between Jesus, President Bush and Democratic challenger John Kerry, with Jesus saying: "Mr. President, your doctrine of pre-emptive war is a failed doctrine." All Saints has refused to cooperate with IRS investigators and recently hosted a conference on "The War, the Pulpit and the Right to Preach." Fairfield Christian Church and World Harvest Church, near Columbus, Ohio: Triggered complaints to the IRS by a group of more than two dozen clergy, mostly liberal, for allegedly helping the GOP in the 2006 congressional election. The evangelical Fairfield Christian Church lent its facilities to Republican groups free of charge, while its pastor, Russell Johnson, headed a conservative activist group that featured Republican gubernatorial candidate J. Kenneth Blackwell at many events. The complaints also alleged that Blackwell, who lost his race, flew aboard World Harvest Church's private plane, but the church says the travel was not connected to a partisan political event. Both churches deny violating IRS law. Mount Ennon Baptist Church, Clinton, Md.: Drew a complaint to the IRS for a sermon in which the Rev. Delman L. Coates attacked Republican Senate candidate Michael Steele two days before the 2006 election. At the time, Democratic Senate hopeful Ben Cardin was sitting in the front row. "Everybody of color ain't so kind," Coates told the African-American congregation, in a reference to Steele, who is black. "All of your skinfolk ain't your kinfolk." Cardin, who went on to win the election, is white. The complaint came from the liberal Washington group Americans United for the Separation of Church and State, which typically focuses on fighting the Christian right. Coates denies the sermon was an endorsement. Light of the World Christian Center, Wanamaker Woods Church of the Nazarene, and Topeka Bible Church, Topeka: Cited in an IRS complaint filed by Citizens for Responsibility and Ethics in Washington last year in connection with the failed re-election campaign of Kansas Republican Attorney General Phill Kline. In an internal campaign memo leaked to the press in September titled "church efforts," Kline identified Light of the World and Wanamaker Woods as agreeing to do "lit drops" for his campaign. As another way to use churches, Kline's memo suggests his campaign, "Get the pastor to invite five 'money people,' whom he knows can help." The complaint also cites a news report that Kline used a Sunday morning breakfast at the Topeka Bible Church to invite parishioners to a political rally. The churches have either kept quiet or denied acting inappropriately.   return to the top 5. Philanthropy's New Math   Feb 2, 2007 Chronicle of Higher Education   STANLEY N. KATZ From the issue dated February 2, 2007 Philanthropy's New Math By STANLEY N. KATZ There I was, sitting at my computer wondering how to begin an essay on recent developments in philanthropy, when the daily summary from The Chronicle of Philanthropy lit my screen: "To examine the interplay of self-interest and altruistic behavior, researchers at the National Institute of Neurological Disorders and Stroke, in Bethesda, Md., studied the brain activity of 19 men and women, each of whom was given $128 and asked to make choices about whether to keep the money for themselves or to give some or all of it to charity anonymously." And what did the researchers find? That the "warm glow that many donors get from giving to charity involves the same brain mechanisms that evoke pleasurable sensations after sex, eating good food, and using heroin or other drugs." Hmmm. Who would have thought the problem so simply solved? Still, the article did not say whether apes or rats got the same pleasure, so perhaps it is worth continuing to think about philanthropy. In fact, the publicity given to several recent, incredibly large philanthropic donations leads me to wonder whether something more stimulating than sex or drugs has not been put into American water. Just weeks ago, we heard about the $40-million gift from Oprah Winfrey to establish her Leadership Academy for Girls, near Johannesburg, a 22-acre campus containing computer and science labs, a library, a theater, and a wellness center (along with a new home on the campus for Ms. Winfrey, who denied that the school was elitist and needlessly luxurious, noting that "beauty brings out the beauty in you"). Of course the blockbuster donation of 2006 was the $30.7-billion pledge made in June by Warren Buffett to the Bill & Melinda Gates Foundation. Yes, Virginia, billion, not million! And Buffett's gift was an augmentation to the Gates Foundation, created only in 2000, whose assets as of October 2006 had risen to $29.1-billion. Billion, not million! Nor have those whom we traditionally called rich stopped increasing their giving. Last November, David Rockefeller, the last surviving son of John D. Rockefeller Jr., announced a $225-million pledge to the Rockefeller Brothers Fund (actually, a bequest to be made after his death). Only a few years ago, his pledge would have seemed extraordinary. But contemporary philanthropy in the United States is now conducted according to what might be called the New Philanthropic Math. Readers here must be aware of the staggering number of $100-million-plus gifts to university endowment drives. Donations that once seemed princely are now routine. As we have all heard, bonuses for directors of top national banks, for traders, and, of course, for hedge-fund managers have continued to rise. That is the New Social Math in America that lies behind the New Philanthropic Math. The expectation is that such windfall wealth (I know, they "earned" it) will roll over into charitable giving. Last fall The New York Times described a young medical researcher turned i-banker whose income is "easily in the seven figures," whose net worth will rise to "more than $20-million," and who thinks of Bill Gates and Warren Buffett as role models: "They are going to make much greater contributions by having made money and then giving it away than most, almost all, scientists," the former researcher told the Times, adding that he sees philanthropy as a way to build a legacy. That, it seems to me, makes philanthropy an excuse for avarice. But I do not want to focus on motivations, always the most ambiguous aspect of charitable giving; rather, I want to notice the historically unique levels of funds that are coming into play. How much will they change the philanthropic sector we have come to know over the last 100 years? From the start, modern philanthropy, which was substantially the creation of John D. Rockefeller, Andrew Carnegie, and their contemporaries, was a response to the unprecedented amount of liquid and disposable wealth available to the first generation of the industrialist superrich. Both Rockefeller and Carnegie found, quite literally, that traditional charitable donations did not permit them to give away their wealth fast (or efficiently) enough to satisfy their sense of financial stewardship. They thought a new strategy for giving was demanded by the times, and they called it "philanthropy." If charity was the giving of alms — that is, the alleviation of individual cases of distress — philanthropy was a strategy for doing good works in gross. Rockefeller and Carnegie agreed (if only on this) that the key to philanthropy was the search for the root causes of distress (whether physical, economic, or social) and for the techniques to eradicate them. Philanthropy was the application of the same organizational and scientific skills to giving away money that had enabled the first generation of philanthropists to amass such stunning levels of wealth. There have been subsequent eras when the rich have been very rich. The 1920s, Andrew W. Mellon's era, was probably the most important. What is significant today is that the upward redistribution of wealth that began in the late 1970s has recently recreated almost the same concentration of wealth in the possession of the top 1 percent of the population as in 1929. There have been only a few times in our history when so few have had so much. But today's wealthy are to some extent different sorts of people from their predecessors, if only because they have so frequently earned their money so quickly, through financial markets. One thing that does not appear to be new in large-scale philanthropy is its institutionalization. The founding era of philanthropists created a novel legal and organizational structure, the private foundation, as the vehicle to realize their goals. In its most generic form, the modern foundation is organized as a perpetuity (though a minority of donors have, from the beginning, placed time limits on their donations) operating with an expansive statement of purpose, usually invoking some sort of commitment to do good on a broad scale, "for the betterment of humankind" or something similar. The foundation is governed by a self-perpetuating board of trustees who initially may include the donor, his or her family, and close business associates. The several philanthropic foundations established at the outset of the 20th century quickly assumed common organizational attributes: They relegated trustees to general-policy-planning roles, while reserving day-to-day management to a CEO and full-time staff. They developed explicit program areas, each managed by a program officer, and they typically acted as grant makers, interacting with applicants to refine goals. They usually allocated for grant making some portion of the annual return on their endowments, ordinarily something short of the real value of the return. And generally speaking, they made their grants to nonprofit organizations, or "charities." Many of the best-known early foundations developed widely diverse philanthropic programs that changed over time, so we call them "general" foundations, of which Rockefeller and Carnegie are the ur-types. While the private philanthropic foundation remains the principal vehicle for wealthy donors, two other major forms have developed. The community foundation emerged just after World War I to solicit and manage endowed funds from (traditionally) wealthy individuals in a locality, merging their capital into a centrally managed fund and making grants to a wide variety of local nonprofit organizations. The corporate foundation, sometimes endowed but normally financed annually by a corporation, emerged as a distinctive and growing philanthropic force just after World War II. Community foundations have grown strikingly in recent years, while corporate philanthropy has declined. Despite those developments, however, given the U.S. tax system's deductions for (itemized) charitable contributions, and our propensity to volunteer, individual gifts and family contributions continue to constitute a powerful charitable force in American society. But I want to use the term "philanthropy" in the special sense originated by Carnegie and the senior Rockefeller: as the self-conscious donation of truly large sums of private wealth to do public good by addressing the causes (and also manifestations) of social problems of all kinds. It is that large philanthropic ambition that best captures the spirit of American philanthropy and accounts for the extent to which it has been a creative force in American society. As I have already suggested, it is not only the ultrarich who aspire to that kind of philanthropic role. Bill Clinton has begun a foundation with the objective of securing donations from wealthy philanthropists to make common efforts. At a mid-November conference, he gave them a pep talk: "It is impossible to overstate the impact private giving will have on the public good," he said. He urged philanthropic action where government cannot or does not act, arguing that the private sector has the capacity to experiment in ways that states do not. And he called on the group, which included Michael Bloomberg and Ted Turner, to focus on global problems. Wealthy donors have responded to Clinton's pitch. The steadily growing total resources available and the recent spike in very large foundations are worth noting. Just as the world of the superrich has expanded rapidly, surrounding us with McMansions, so the world of philanthropy is steadily establishing McFoundations. The list of the 100 largest American grant-making foundations has been transformed in less than a decade. As of October, the Foundation Center (the authoritative source of foundation data in this country) ranked the Gates Foundation first (with more than $29-billion in assets), followed by the Ford Foundation ($11.6-billion), the J. Paul Getty Trust ($9.6-billion), the Robert Wood Johnson Foundation ($9.4-billion), the Lilly Endowment ($8.4-billion), the William and Flora Hewlett Foundation ($7.3-billion), and the W.K. Kellogg Foundation ($7.3-billion). All in all, there were 50 foundations in 2006 with assets of more than $1-billion (the 50th was the Kimbell Art Foundation in Texas, with just over that figure). Even the lowest ranked of the top 100 foundations had more than half a billion in assets (the Evelyn and Walter Haas Jr. Fund, with $553,365,428). There is, then, serious money in the foundation sector. No other country in the world has anything approaching it. But the sector is just about a century old, and, from a historian's point of view, its most striking aspect is the continuity of organizational form and behavior over that entire period. There is a great deal that is new in the sector, but the underlying patterns have been consistent. The intriguing question is what impact the new megafoundations will have on the traditionally large foundations. The Ford Foundation, now the second largest, is just over a third the size of the Gates Foundation, while the Rockefeller Foundation, one of the oldest and for many years the largest American foundation, is now no more than 15th in the pecking order. "So," a story in the Times this month notes, "they are working to prove that money alone is not the measure of a foundation." Judith Rodin, the former president of the University of Pennsylvania and the current president of the Rockefeller Foundation, says she is looking for ways "to be more flexible and faster, to take a big idea and really run with it when it's right, and to be more receptive to ideas coming in to us." And where are those ideas going to come from? Rockefeller's Web site now asks the public "for ideas that the institution can turn into projects." I don't take that proffer seriously, but it does show a sense of desperation and a need for self-justification in what used to be the flagship philanthropic foundation, and the other historically big foundations are heading down the same path. They are trying to reduce the number of their programs and rationalize them, and are attempting to measure impact in terms of months rather than years. Messrs. Carnegie and Rockefeller would have been appalled. Their objectives were bigger and longer term. And one of the most important reasons why we in the United States have created such a striking public sector is that, once philanthropy began to take hold in the early 20th century, we made public-policy decisions to sustain and support it. We did so by permitting the creation of general-purpose perpetuities dedicated to serving an indefinite class of beneficiaries (through changes in state trust law) and by creating tax deductibility for donors (in both state and federal tax law). It should be noted that the earliest foundations were created prior to the 16th Amendment's enshrining of the federal income tax in the Constitution in 1913, but tax incentives have since undoubtedly played a significant role in encouraging the establishment and augmentation of foundations. The existence of tax breaks for donors (sometimes called "tax subsidies" by those who want to make the point that a portion of national philanthropic assets are in fact forgone taxes) lends force to the argument that the public should have some say in the expenditure of philanthropic funds, that foundations ought to be accountable to the government. From time to time, there have been complaints that foundations are aristocratic and hold too much sway over the decision-making process of a democracy. From time to time, Congress has responded with investigations and legislation (limits on political activity, requirements for minimum payout on investment returns, restrictions on self-dealing transactions by donors, and the like). To the extent that foundations are charitable corporations under various state laws, they are subject to the scrutiny of the attorneys general of the states in which they are incorporated, but few states attempt to do more than police egregious violations of legal requirements. Federal responsibility for foundations, as defined by successive taxation acts, lies with the Internal Revenue Service, but the agency allocates very few of its resources to tax-exempt entities. The bottom line is that American public policy basically permits individual donors and foundations substantial freedom to define their own purposes and to further them. At the same time, the sector has developed few internal mechanisms to ensure accountability — or even to define common standards of conduct. Yet on the whole, philanthropy resides below public notice. The failure of all but a few newspapers to have a philanthropy "beat" is indicative of the extent to which the sector is poorly understood by even the politically literate public. The news situation improved markedly in 1988 with the creation of this newspaper's sister publication, The Chronicle of Philanthropy, but the news in the mainstream media about philanthropy ordinarily takes the form of reportage either of recurrent Congressional interest in the conduct of foundations and other nonprofit organizations, or of allegedly scandalous behavior by philanthropic institutions, particularly in their investments. Both those issues are genuinely important, but considering the size and importance of the philanthropic sector, there is not enough informed comment on philanthropy in the national press, and even less on television. The field is doing better when it comes to scholarship. In the last 25 years, systematic academic attention to philanthropy has emerged. The process began through the advocacy of the newly established philanthropy trade organizations (the Council on Foundations and Independent Sector), the financial support of several large foundations, the establishment of a central data bank at the Foundation Center, the opening of the Rockefeller Archive Center (the largest and most important dedicated philanthropic archive), and the renewal or establishment of professional disciplinary organizations: ARNOVA (the Association for Research on Nonprofit Organizations and Voluntary Action) and ISTR (the International Society for Third-Sector Research). Those associations publish two fine journals, NVSQ and VOLUNTAS. And several university-based philanthropy (and/or nonprofit) research centers have been created, of which the largest is the Center on Philanthropy at Indiana University, in Indianapolis. As a result, book publication in the field of philanthropy has increased. Several publishers have displayed interest, including Indiana University Press, which has a fine series. But the past year has seen something special: the publication of not just a few, but a significant number of important books on philanthropy. While most are academic books that will not reach large audiences, the fact that several of them are written by practitioners gives me hope that at least an internal conversation is possible within a field that has long struggled to maintain a connection between scholars and practitioners. It is fascinating that no fewer than four biographies of the long first generation of philanthropists appeared in 2006, a fitting tribute to the lasting impact of their intellectual and organizational influence on the field. We now have the historian David Nasaw's Andrew Carnegie, which draws attention to the role that philanthropy played at the end of Carnegie's life and the extent to which his strong and well-articulated personal thinking shaped his giving. Carnegie made the point, after all, that the wealthy had an obligation to society that ran far beyond the needs of their own families. He developed the notion of the social uses of wealth and stressed the long-term potential of philanthropic investment. Nasaw, a professor at the Graduate Center of the City University of New York, gives us a fine and readable book, although he tells us little about Carnegie's philanthropy that we did not learn from Joseph F. Wall's magnificent 1970 biography, also titled Andrew Carnegie, one of the books that truly launched serious scholarship on this field. That overlap is not true of the other three biographies, each of which makes an original contribution to our understanding of the founding generation of philanthropists. Julius Rosenwald, the Sears Roebuck magnate, was one of the most original and important of those, a Jew who focused on strengthening "Negro" education in the South, and who, alone among the founders, set a time limit on the life of his foundation. In Julius Rosenwald: The Man Who Built Sears, Roebuck and Advanced the Cause of Black Education in the American South, his grandson Peter Max Ascoli has done well in searching out the scattered sources that previous authors have neglected. In particular, we now have a much clearer understanding of Rosenwald's relations with contemporary social reformers like Jane Addams. Similarly, in Mrs. Russell Sage: Women's Activism and Philanthropy in Gilded Age and Progressive Era America, Ruth R. Crocker has done a wonderful job in reconstructing the life of Olivia Sage, the widow of the niggardly timber baron Russell Sage, who used her inheritance to create the first social-science and social-welfare foundation, the Russell Sage Foundation, in 1907. Crocker, a professor of history and women's studies at Auburn University, reminds us that while foundation philanthropy was almost entirely a male domain, there were significant female figures in what was also the first era of women's professionalization in the United States. I have worked in the foundation's records, and until I read this book in manuscript, I did not believe there was enough information for a biography. Crocker has done a stunning job of proving me wrong. David Cannadine's massive biography Mellon: An American Life takes on another figure of whom we have not had a biography. Cannadine, a British historian at the University of London, superbly tells the story of a very different sort of donor, one whom we should think of as part of the second generation of philanthropists. Mellon limited his scope almost entirely to accumulating works of art and presenting them to the public in what is now the National Gallery of Art, in Washington, D.C. Like Rosenwald, who financed the Museum of Science and Industry, in Chicago, Mellon did not want his name attached to his gallery, but unlike Rosenwald, Sage, Carnegie, and the others of the first generation, Mellon showed no interest in the creation of a broadly based foundation. His son and daughter subsequently set up their own foundations, which were not merged to create the large and important Andrew W. Mellon Foundation until 1969. These biographies not only tell the story of the early foundations more fully and accurately than previous accounts, but they also make the important point that much of philanthropy, even large-scale philanthropy, is intensely personal. Foundation philanthropy was substantially shaped by the specific visions of its founders, even if the remarkable uniformity of institutionalization soon made philanthropic foundations appear more similar than different. Bill Gates, on the other hand, seems to have backed into his role as a philanthropist, appropriating quite traditional notions about education and public health to structure his giving. And Warren Buffett manifestly has no philanthropic ideas of his own, except to endorse those of the Gateses. A second group of books concerns how contemporary foundations function. Peter Frumkin, a sociologist at the Lyndon B. Johnson School of Public Affairs at the University of Texas at Austin, makes a bold attempt to bring social science to bear in Strategic Giving: The Art and Science of Philanthropy. Typical of recent — and critical — insider writing, Frumkin attempts to deal with the weaknesses of professionalized philanthropy. He sees three: lack of effectiveness, lack of accountability, and pale claims to legitimacy. As I have noted, institutional accountability and political legitimacy have long — if only periodically — been noted as problems beneath our extensive edifice of philanthropy. But most recent writing has focused on the question of effectiveness. The mantra of insider critics of foundation philanthropy is that it is not "strategic" enough to be "effective." In general the bias of critics has been in the direction of more businesslike (or, perhaps, "business school") analysis of philanthropy, analogizing philanthropic investments to business investments and regarding foundations as nonprofit companies. Frumkin's book is an excellent example of recent attempts to bring more rational and disinterested analysis to the understanding of how foundations operate. He argues, for example, that "questions about effectiveness have been weakly transformed into conversations about the performance of grantee organizations rather than focused on the more central issue of achievement of the donor's philanthropic mission and objective." He offers sensible suggestions (more sensible than social-scientific) to help donors "chart their philanthropic plans," but I do not think those acknowledge the degree of thoughtfulness that has characterized the planning and follow-through of the best of the "old" foundations. Helmut K. Anheier and Diana Leat take a broad and international view of the purposes and function of philanthropic foundations, in contrast to that of Frumkin and most commentators on the American experience. But in Creative Philanthropy: Toward a New Philanthropy for the Twenty-First Century, they, too, are hooked on "effectiveness." Anheier, a professor of social welfare and public policy at the University of California at Los Angeles, and Leat, a visiting fellow at the London School of Economics and Political Science, write, "Rather than simply asking for more philanthropic money, the need is to find ways of making new and existing resources work more effectively." For them, unlike for Frumkin, the answers are not in planning and management, but rather in "improving civil discourse about important issues using evidence, not ideology." Foundations, they say, "act as both entrepreneurs and underwriters of new conversation, debate, and change." While both of the authors are distinguished social scientists, all that seems more hortatory than analytic (although the book is good at calling attention to the underlying commitment of philanthropy to use private money for public good). The editors of The Legitimacy of Philanthropic Foundations: United States and European Perspectives — the policy researchers Kenneth Prewitt, of Columbia University; Mattei Dogan, an emeritus professor at the University of California at Los Angeles and now at the National Center for Scientific Research, in Paris; Steven Heydemann, of Georgetown University; and Stefan Toepler, of George Mason University — give an excellent glimpse of the extent to which Europe has paid recent attention to the possibility of promoting private action for the public good through the creation of foundations. As the essays in the book show, there is a growing number of superfoundations outside the United States, in large part because they are seen as a way to assist in dismantling the welfare state. But the book does not grapple with the issue of how much institutions built on American patterns (dependent on a weak-state aversion to public welfare) can be transferred, or how accountable they will be if they are. That remains to be seen. But another recent book brings a uniquely valuable perspective to the discussion. The Foundation: A Great American Secret, just published, is written by a remarkable figure in the philanthropic field. Joel L. Fleishman is a scholar who spent many years presiding over a massive (and very new) philanthropic foundation, now called the Atlantic Philanthropies, and who has returned to the academy at Duke University to think about how philanthropy can achieve its goals and conduct itself in an honorable manner. For many years, Fleishman has also served as the conscience of the philanthropic community, and his book is particularly concerned about enhancing the transparency, and hence accountability, of foundations. Fleishman believes that the sector is the engine through which private wealth can change the world for the better. Like many recent writers, he worries that the foundation sector "seriously underperforms its potential with respect both to the social benefit it might otherwise have conferred if it were not underperforming and also to the mission that its freedom from substantial government and social control is designed to enable it to fulfill." Using case studies of 100 foundations, Fleishman gives us an insider's book full of trenchant prescriptions. The three keys to foundation management are "discipline, boundaries, and persistence," he believes, and he gives examples of how they work, and how their lack leads to failure. Arthur C. Brooks's Who Really Cares: The Surprising Truth About Compassionate Conservatism is entirely different. Brooks is a well-known academic economist and also an opinion writer for The Wall Street Journal. Disclosure: I know Arthur, and I like him (and that is true of most of the authors under review). But I am dumbfounded by the reductionist and partisan tone of Who Really Cares, which reads more like a political screed than an academic analysis. The argument, endlessly reiterated, is that conservatives are more charitable than liberals (whom the author defines as those with "a left-wing political ideology"). Brooks argues that there are four causes of charitable behavior in the United States: "religion, skepticism about the government in economic life, strong families, and personal entrepreneurism." If that sounds like the program of a major political party, well, it is. The underlying implication is that what liberals ("America the selfish") get wrong is their belief that it is the responsibility of the state to ensure social justice. Brooks's specific target is Ralph Nader, whom he repetitively quotes as saying, "A society that has more justice is a society that needs less charity." What seems inexplicable to Brooks is to me an empirically obvious statement. Although it is not his intention, Brooks has done us a service by pointing to the underlying tension in the role of philanthropy. Remember that from the start philanthropists have been committed to using private wealth to serve public need. They were deeply devoted to that goal. They were also, of course, overwhelmingly politically conservative. They believed that the private sector needed to step up to enhance the public welfare, both to relieve the political pressures of popular unrest and to reduce the chances that the state (especially the federal government) would rise to that task. The specter they feared was the emergence in the United States of the sorts of welfare democracies that were on the rise in Europe in the late 19th and early 20th centuries. At the same time, although the philanthropists did not announce it, their foundations were quite willing to partner with government in particular programs, and even more willing to do the research necessary to design effective state strategies for the public welfare. And that is one reason why, despite occasional complaints about the potential of political abuse by private philanthropic wealth, our governments have been extraordinarily deferential to the imperatives of growth for the entire charitable sector. I confidently predict that such a government attitude will survive well into this new century. What interests and concerns me is whether some of the new trends of megaphilanthropy may change the nature of the sector and the public debate about it. It has often been remarked that the sheer size of the Gates Foundation, both in terms of endowment and annual investments, makes the foundation larger in its potential for international aid than all but several existing nations. And the foundation has but a few trustees, fewer by far than any comparable foundation. The crucial issue is not the size of foundation assets. Rather it is whether a traditional philanthropic organization (the foundation), its management (the program-officer system), and its concepts (the search for root causes) can be adapted to the thoughtful and responsible expenditure of such vast sums of money by an institution that in effect will be conducting its own foreign policy. My friend and colleague at Princeton, the philosopher Peter Singer, would object at this point that I am missing the bigger issue. In his powerful article in The New York Times Magazine in December, Singer argued the utilitarian case for prioritizing the alleviation of global poverty as the imperative of philanthropy. He admires the ambition and objectives of Gates and Buffett and calls today a new golden age of philanthropy. He is not concerned with questions of motives, which he says "pale into insignificance when we consider the effect of what Gates and Buffett are doing." He is concerned that "in the real world, it should be seen as a serious moral failure when those with ample income do not do their fair share toward relieving global poverty." But I am afraid that my concerns are more with policy than morality, and I believe, with some of the authors discussed here, that thoughtful procedural improvement is desperately needed in domestic philanthropy. The irony here is that while new traditionally structured philanthropies are emerging (the Gordon and Betty Moore Foundation, the Michael & Susan Dell Foundation, the Broad Foundations, and many others), their donors (and frequently their staffs) are new to the sector, and they are struggling to adapt old models to new donors and purposes. At the same time, though for very different reasons, the old large foundations are becoming less adventurous and imaginative, more and more focused on doing short-term good, as measured by specifiable, incremental change. And of course all of this is happening during an era of exceptional political instability, at a time when we may well be seeing the beginnings of negative public reaction to the aggressive government withdrawal from social responsibility that America has followed for a generation or more. If I am correct, then we should expect an important recalibration in social expectations of philanthropy in relation to the state. Philanthropy matters, both politically and practically, in the United States — and around the world — in the 21st century. Stanley N. Katz is director of the Center for Arts and Cultural Policy Studies at the Woodrow Wilson School of Public and International Affairs at Princeton University, and president emeritus of the American Council of Learned Societies.   return to the top 6. What's the Big Idea?   Feb 2, 2007 Chronicle of Higher Education   ERIN STROUT It's a cautionary tale that has become a bit of a legend in the world of higher-education fund raising. A vice president for development at a major public research institution reaches out to a big donor, who had been generous in the past, to help close a capital campaign with a gift of $25-million. The donor declines. But not long afterward, the administrator reads that the same person decided to give $50-million to an Ivy League institution. The fund raiser asks the natural question: Why? "You asked me to help end a campaign," the donor says. "They asked me to help cure cancer." The anecdote — told with the stipulation that the names of the institutions be withheld — cuts to the core of a vexing problem for many colleges: coming up with ideas for major donations that are not only enticing to the most generous philanthropists but are also aligned with an institution's goals. With 28 colleges now in the midst of capital campaigns with goals of $1-billion or more, finding the right ideas has never been more important. "Donors want their gifts to have a transformational impact on society," says Brent R. Keltner, managing vice president at Eduventures Inc., an education-consulting firm. "They don't want to just give to a college's operating funds." A recent Eduventures survey of senior fund raisers at 72 public and private research universities showed that developing and executing strategies for big donations was among the top four challenges those officials faced. Such donations vary in amount, depending on the size of the college, but they are generally considered to be gifts of $1-million or more. Lead donations, those announced at the beginning of a campaign, are often upward of $25-million in $1-billion drives. "The challenge is not a lack of $25-million donors," one chief development officer at a public university responded to the survey, "it's a lack of $25-million ideas." To find those ideas, many fund-raising professionals are asking more people associated with a college, such as deans, leading faculty members, and sometimes the donors themselves, to help come up with projects that can compete not only with other colleges, but also with other charities. Soliciting Ideas At the University of California at Irvine, Tom Mitchell, vice chancellor of advancement, created a new process to come up with lead-gift ideas for the institution's next big campaign, still a few years away, by copying the practices of universities that have consistently received the largest gifts in the last five years. Following their lead, Mr. Mitchell has created six teams of about 11 people each, including faculty and staff members and deans. Each team is exploring a general theme linked to the goals of the institution and to larger societal issues, such as "nurturing a diverse community," "developing models for health-care delivery and discovery," and "developing leaders for the local and global community." "We have found that those who give very large gifts want to see very big ideas that can solve important and significant problems," Mr. Mitchell says. "So we're going to figure out what the problems are that we're already trying to solve and which ones we're prepared to solve." By the end of February, each team will generate three ideas focused on areas in which Irvine already excels or areas that have potential to become a niche for the institution. "We will narrow the list down to those ideas that are in markets that can address important issues on a community, state, national, or international level," Mr. Mitchell says. From there, Irvine's chancellor will review the list, select the most promising opportunities, and create new teams around those ideas, this time asking local community leaders, alumni, and supporters of the university to help shape them into feasible donation proposals. The ideas will also help shape the focus of the campaign. The point of the exercise, Mr. Mitchell says, is that to compete for philanthropic support, fund raisers have to think about what's hot to donors (biotechnology and health-care issues) and what's not (operating funds), and make sure that the institution will be able to show donors tangible results for their money. "I think that many colleges run into difficulties because institutions are not organizations that are set up to be collaborative," Mr. Mitchell says. "Schools operate in silos." Thinking Bigger Laurel Price Jones, vice president for advancement at George Washington University, agrees that assembling top-notch faculty members and leaders of academic departments is ideal when trying to shape ideas. Although the Eduventures survey shows that 31 percent of successful lead-donation ideas came from donors themselves, Ms. Jones prefers to work with ideas that come from within. She says ideas generated by benefactors can often put a strain on the institution because they are sometimes not tailored to its strengths or strategic plan. A donor recently came to George Washington with a gift idea that was not of interest to the institution, Ms. Jones says. But with up to $20-million hanging in the balance, Ms. Jones decided to try to shape the proposal into something that was more in line with the university's needs. She has requested ideas from the faculty members of an academic department related to the donor's interests. The challenge of including faculty members and department chairmen is getting them to think beyond the limits of a budget, Ms. Jones says, because they have been trained to work within those limits. To faculty members, thinking big means requesting another endowed chair, she says, instead of considering an idea that could transform a department or the local community. I'm trying to inspire them with a huge opportunity if they can help solve the puzzle," she says. "It's not an exercise that occurs naturally for them." Tyler Anbinder, chairman of George Washington's history department, worked on the proposal. He says he appreciated being asked to help, instead of inheriting another "endowment for something we don't need." But he does question whether it's always appropriate to ask for such large gifts. "We'd be overjoyed with just a couple of hundred thousand dollars to start a new center," Mr. Anbinder says. "I appreciate that development people dream big, but I wonder if we'd be more successful if we asked for less." Sometimes the best ideas are those that help the donor as well as the institution. When Ms. Jones was a fund raiser at the Rochester Institute of Technology, B. Thomas Golisano, founder of Paychex Inc. and a trustee of the university, was lamenting his struggle to hire information-technology employees. He realized that a $14-million investment in the institution's growing computer-science department would not only create a new college for the institute, but benefit his company. "It was not a huge idea, but it was well aligned" with the Rochester president's goals, Ms. Jones says, and it fulfilled Mr. Golisano's and other companies' needs for skilled labor. Shared Values Tufts University has announced multiple lead donations in the last year as it has moved to complete a $1.2-billion campaign by 2011. Before the campaign became public, the university raised $615-million, more than half of which came from members of the Board of Trustees. Brian Lee, vice president for university advancement, says the key to securing the lead gifts was to let donors look at possibilities that would have an impact beyond the university. "We didn't want this to be about a building or a piece of equipment," he says. One of the more unusual and profitable donations came in 2005 from Pierre Omidyar, a Tufts alumnus and co-founder and chief executive of eBay, and his wife Pam. The $100-million gift made a big splash in the news media because it is being used to make microloans throughout the developing world. The money is managed as part of Tufts' endowment. Half the returns from the microloans are going to financial aid and scholarships and the other half are being reinvested. The idea came from Mr. Omidyar himself. Some fund raisers at other universities question whether Tufts should have accepted the donation, saying that it does not fit the goals of the campaign and is probably costly to administer, but Mr. Lee calls it "a gift that is based on our values." Other lead donations have included a $40-million gift from Jonathan M. Tisch, chairman of the Loews Corporation, who endowed the College of Citizenship and Public Service, which now bears his name. (See "How 2 Big Gift Ideas Were Hatched," Page A21.) The Veterinary School received $50-million from the Cummings Foundation. William S. Cummings, president of the foundation, said he had a special interest in the role of veterinarians when animals are used in the "humane development of life-saving drugs." Mr. Lee says institutions do not often find themselves with the perfect mix of opportunities to capitalize on so many big donations as Tufts recently has. He says the ideas flow more freely when an institution's leadership is trusted by donors and has set a clear vision that includes the involvement of key benefactors. "There are moments when the likelihood for success is stronger," he says. "And of primary importance is that there is established confidence in the leadership and a trust that the university will be a faithful steward of the investment." HOW 2 BIG GIFT IDEAS WERE HATCHED University of California at Irvine Donors: William H. Gross, co-founder of Pacific Investment Management Company, known as Pimco, and his wife, Sue J. Gross Idea: The Grosses have donated millions to health-care causes in Southern California. Two of the couple's friends who are employed by the university — a faculty member in quantitative finance and the institution's general counsel — invited the Grosses to tour Irvine's research center in 2005. But the Grosses were not swayed until July 2006, when they saw a report on 60 Minutes about the work of Hans S. Keirstead, an associate professor of anatomy and neurobiology at Irvine and a pioneer in human embryonic-stem-cell research. Already interested in supporting stem-cell research, the Grosses decided to invest in Irvine because of Mr. Keirstead, who had used a treatment derived from human embryonic stem cells to improve mobility in laboratory animals with spinal-cord injuries. Result: The Grosses gave $2-million toward equipment, operations, and staffing needs for the stem-cell research center, and pledged another $8-million to match state funds for construction of a new facility. Tufts University Donor: Jonathan M. Tisch, chairman and chief executive of Loews Hotels Idea: The gift to what was formerly the University College of Citizenship and Public Service guarantees the courses, fellowships, and other programs of the college will be permanent. Mr. Tisch was attracted to the idea that the college serves all parts of the university and all disciplines, offering students the public-service opportunities meant to make a difference beyond Boston. The college was started as an experiment in 2000 with $10-million in seed money from Pierre and Pam Omidyar, who have also given $100-million to Tufts to make small loans in impoverished countries. Result: With a keen interest in corporate responsibility and appreciation for the opportunities he had for civic involvement while a student at Tufts, Mr. Tisch gave $40-million to the Jonathan M. Tisch College of Citizenship and Public Service in the hope that Tufts will lead the country in producing graduates who engage in public service.   return to the top 7. In Katrina's Wake: Where Is the Money? Congress authorized billions to rebuild, but only half has been spent. Worrying about fraud   Jan 27, 2007 The Wall Street Journal   By Christopher Cooper In August, 2005, Hurricane Katrina flattened two bridges, one for cars, one for trains, that span the two miles of water separating this city of 8,000 from the town of Pass Christian. Sixteen months later, the automobile bridge remains little more than pilings. The railroad bridge is busy with trains. The difference: The still-wrecked bridge is owned by the U.S. government. The other is owned by railroad giant CSX Corp. of Jacksonville, Fla. Within weeks of Katrina's landfall, CSX dispatched construction crews to fix the freight line; six months later, the bridge reopened. Even a partial reopening of the road bridge, part of U.S. Highway 90, is at least five months away. SPENDING CHOKES The Situation: President Bush touts $110 billion in federal money that's been sent to the Gulf Coast, but 17 months after the storm, not much has reached the streets. The Reason: A spool of federal red tape, abetted by states' antifraud regulations, is delaying building projects and aid handouts. What's next: Barring action in Washington to streamline the process, a full recovery could be years away. "It shows the difference between the private sector and the public sector," says Harold "Buz" Olsen, chief administrative officer of Bay St. Louis, who displays a photograph of the train bridge in the city council chambers as a reminder. "By the time CSX was done with their bridge, we were just getting around to letting the contract on ours." It's been almost 17 months since Hurricane Katrina pounded coastal Mississippi and southeast Louisiana, and about a year since Congress authorized the bulk of its rebuilding aid for the region. More than four months have passed since President Bush visited New Orleans on the anniversary of the storm and extolled the "amazing" reconstruction effort. But a review of the devastated region shows that rebuilding is in a deep stall. Tens of thousands of residents remain displaced as authorities dither over how to disburse housing assistance. Many crucial infrastructure projects have yet to start. Of the tens of billions appropriated by Congress, half remains unspent. There are many culprits. Among them: the size of the disaster, which continues to overwhelm agencies charged with rebuilding; the crush of competing bureaucracies, which has delayed many projects including the Bay St. Louis bridge; and weak local leadership. In addition, many reconstruction efforts are ensnarled in spools of red tape spawned by a bevy of old and new government procedures. A prime example: an obscure set of 30-year-old Congressional rules designed to combat corruption known as the Stafford Act. Brian Gauvin/Getty Images Bay St. Louis Mayor Eddie Favre standing in the ruin of his house. According to the White House, the federal government has provided $110 billion for the Gulf Coast region. But nowhere near that amount of actual cash has been made available. The total is spread over five states and covers damage done by three separate storms. Some of it consists of loans. A chunk comes from government insurance payouts that ultimately derived from premiums paid by homeowners themselves. Of $42 billion given to the Federal Emergency Management Agency, the agency has spent only $25 billion, federal records show. Most of that went to temporary housing, debris removal and emergency operations in the early days of the disaster. It has spent more than $4 billion on administrative costs. Louisiana says the Army Corps of Engineers has spent only about $1.3 billion of the $5.8 billion it received to repair the levees in and around New Orleans. Only about $1.7 billion of the $17 billion received by the Department of Housing and Urban Development has made its way to the streets, the agency says. In New Orleans, officials say they have received only about 14% of the estimated $900 million in reconstruction money they estimate is needed to fix the ruined city. "We have lots of meetings," says Cynthia Sylvain-Lear, the city's liaison with FEMA. The state and federal anti-corruption regulations offer a glimpse as to why reconstruction efforts are going so slowly. The White House has kept in force a set of rules known as the Stafford Act. Under its guidance, rebuilding funds must be accompanied by a 10% match from local governments, on the theory that localities won't misspend if their money is also on the line. Similarly, FEMA will cover only 75% of a project's cost until the job is complete. The requirement has delayed projects while cash-strapped towns in two of the U.S.'s poorest states try to rustle up financing. Meanwhile, both Louisiana and Mississippi have been so keen to burnish their images that they created their own set of lumbering regulatory bureaus and antifraud audit shops. The Stafford Act has been waived in the past -- it didn't apply to Manhattan in September 2001 or South Florida following Hurricane Andrew in 1992 -- but it remains in place along the Gulf. President Bush dropped the Act for a time for certain projects, such as emergency repairs and debris removal, only to reinstate it later. The region's reputation for corruption is one reason why. Influence peddling on the coast has a long history, from 1930s Louisiana Gov. Huey Long to Edwin Edwards, a three-term governor currently serving a 10-year prison sentence. Recently, Mississippi was named the most corrupt state in the nation by Corporate Crime Reporter, a Washington, D.C., publication. "The question is not whether Congress should provide for those in need, but whether state and local officials who have been derelict in their duty should be trusted with that money," Rep. Tom Tancredo, a Colorado Republican, wrote in a 2005 letter to then-House Speaker Dennis Hastert. "Their record during Hurricane Katrina and the long history of public corruption in Louisiana convinces me that that they should not." The result of this vigorous policing: In Louisiana, projects to rebuild a hospital along the western coast, a school-board building in suburban New Orleans and a prison south of the city remain suspended, the state says, as locals hunt for matching cash. Meanwhile, a $7.5 billion pot intended for washed-out homeowners sits virtually untouched as applicants are forced to run a gauntlet of requirements, this time imposed by Louisiana. To prevent false claims, applicants must attend two personal meetings with state bureaucrats, provide fingerprint verification and mug shots, as well as supporting documentation, including letters from insurance companies and banks. To date, Road Home, as the program is called, has drawn nearly 100,000 applicants. As of this week, it had disbursed only 258 grants for a total of $14.4 million. Mississippi, which operates a similar but far less restrictive grant program, has distributed $665 million to 11,827 homeowners. In January 2006, Alan Rubin, a retired businessman, applied to Road Home on behalf of his elderlyparents, whose $200,000 house in New Orleans's fashionable Lakeview neighborhood took on 12 feet of water. They didn't have flood insurance. After completing a 40-question questionnaire, Mr. Rubin had a four-hour interview with a screener in September, he recalls. Ten weeks later, a state-contracted appraiser visited the property. Eleven months after the initial application, the state came back with a compensation figure: $550. Mr. Rubin complained to his local newspaper, the Time-Picayune, which chronicled his experience in late December. The day the story was published, Mr. Rubin received a call from an employee with ICF International Inc., the Arlington, Va., company that manages Road Home under a $750 million contract. He says the employee blamed a computer error -- his parents were in fact entitled to $150,000. Carol Hector-Harris, a spokeswoman for ICF, declines to discuss Mr. Rubin's case other than to say the family "is very satisfied at this point." Mr. Rubin qualifies that: He's still waiting for the check. "I'm told that it's somewhere in the process." Andy Kopplin, executive director of the Louisiana Recovery Authority, which promulgated rules governing the Road Home grants and other federal money pots, defends his state's antifraud procedures. "The subtext in Washington was, 'We couldn't trust folks in Louisiana to spend the rebuilding money wisely,'" Mr. Kopplin says. "One man's red tape is another man's accountability." At the federal level, Bush administration officials defend their rules. "Some people see the Stafford Act as overly cumbersome, but the provisions of the act are there for a reason, and that reason is to ensure that taxpayer money is spent properly," says Taylor Beery, director of policy for Donald Powell, the administration's rebuilding czar, in a written statement. Running against the tide is Louisiana Sen. Mary Landrieu, a Democrat, who has promised to try rejiggering Stafford Act rules to make them more flexible. She's now chairman of a Senate committee overseeing reconstruction. "I'm not saying we don't need oversight -- I'm saying we need common-sense oversight," Ms. Landrieu says. There have been many complaints about misspending in Katrina's aftermath, but most finger the federal government, not state and local agencies. In October, Louisiana sued FEMA, contending that the federal agency had tried dunning Baton Rouge for $61 million in improper or undocumented expenses. Last month, the Government Accountability Office said FEMA had misspent nearly $1 billion in recovery money since Katrina struck. Local examples of fraud have been on a much smaller scale. Aaron Walker, a FEMA spokesman, declines to comment on the lawsuit, but says in general, "we acknowledge there are business practices we can improve on." Mr. Walker also says the agency disputes the GAO's accounting. It is in the small towns along the Mississippi Gulf Coast where the constipated spending system is most apparent. Bay St. Louis, a town once dotted with ancient oaks and antebellum homes, remains a museum of disaster. The city lost virtually its entire underground sewer system and much of its gas grid. It needs $100,000 in street signs and nearly $4 million in secondary road repairs. Antifraud rules have slowed tasks as basic as ditch digging. Hurricane Katrina silted in most of Bay St. Louis's ditches, which once drained the town's streets. They were later filled with debris by cleanup crews. In late 2005, the city hired an engineering firm to survey the ditch network and work up a cost estimate in the form of a "project worksheet," a FEMA requirement. The estimated cost to clean and regrade the ditches: $3.2 million. Bay St. Louis scrounged $320,000 as part of its obligations under the Stafford Act. After three months, FEMA blessed the project. But before work could start, the city had to send the engineering report to the Mississippi Emergency Management Agency, which reviewed the job. State approval took a month. It took three more months to solicit bids and award the contract. Work started in mid-August 2006. After the first crew started, the state began a full audit of the project. "They call it testing," says Les Fillingame, recovery director for Bay St. Louis. The oversight called for scrutinizing each individual invoice associated with the work. In the case of the ditch mucking, that included hundreds of bills known as "load tickets," paperwork that tallied each truck load of debris. Each load ticket passed through four levels of state bureaucracy before being approved for payment. Sitting in his office, Mr. Fillingame pulled down a ditch-mucking file, four inches thick, from his bookshelf, and let it land on his desk with a thump. "That's every load ticket," he says. Interspersed with the paperwork scrutiny were surprise inspections. Mr. Fillingame says the state and FEMA dropped in on ditch crews to ensure there was no featherbedding. Start to finish, it took just over a year to complete a job that involved only about a month of actual shovel work. It's a process that will be repeated at least 56 more times; Bay St. Louis has that many projects on the drawing board, most of them more complex than ditch clearing. Michael Womack, executive director of the Mississippi Emergency Management Agency, says the process is necessary. "The governor -- he knows what the perception is outside the state of Mississippi," Mr. Womack says. "It's a perception that there's a huge amount of corruption in local government." Mr. Womack estimates that the state's freshly minted antifraud regime could soak up $100 million in reconstruction aid. "There are lots of contractors that are trying to rip the government off. Are we preventing $100 million in fraud? Unfortunately, I think that's the case." Adding to the burdens of dealing with antifraud regulations, Bay St. Louis must also deal with an army of sometimes impenetrable federal agencies. The $50 million reconstruction of Beach Drive, the city's long-admired main drag, has yet to start, even though it has the attention of the state highway department, the state attorney general's office, the federal highway commission, FEMA and the Army Corps. The street can't be rebuilt until an associated seawall and the adjacent pier are reconstructed. FEMA calculates the pier alone will cost exactly $1,370,256.22. To the surprise of locals, the Corps didn't request a congressional appropriation until November, more than a year after the storm. Spokesman Patrick Robbins says the project was submitted to Congress as part of a package of other jobs, following agency policy. "So here we are: The whole rebuilding of downtown Bay St. Louis is contingent on this seawall, and we don't even know if it'll be funded," says Mr. Fillingame. As for the nearby unfinished auto bridge, rebuilding was slowed by labor shortages, the need for public hearings and some local squabbles. As he piloted his mud-spattered truck down what remains of Beach Road, Bay St. Louis Mayor Eddie Favre pointed out local landmarks. There's the once-gracious home of local Congressman Gene Taylor, now a slab of buckled concrete. Bouncing over the rutted berm, recently graveled by the state, more than a year after the storm, Mr. Favre passed his own homesite, also little more than slab. He now lives in a trailer near City Hall. In the aftermath of Katrina, Mr. Favre promised constituents that until the city was rebuilt, he would forgo long pants and instead wear shorts, just as he had the day Katrina hit. Now on his fifth pair, and facing his second chilly winter, the mayor concedes he may have spoken rashly. "At this rate, it looks like I'll be buried in my shorts," Mr. Favre says.   return to the top 8. As Aid Lags, Volunteers Shoulder Rebuilding on Gulf Coast   Jan 28, 2007 Washington Post   Peter Whoriskey, Washington Post Staff Writer Local Gratitude Mixes With Frustration Over Government's Failures PEARLINGTON, Miss. -- The two-by-fours inside the walls of George and Margaret Ladner's new home are inscribed with biblical verses, each written by one of the Alabama schoolchildren who raised money to buy the lumber. The framing work on the house was done by a Christian from Pennsylvania, the exterior planking was put up by people from Texarkana, Tex., and a group from Destin, Fla., worked on other details. "This home was built by the hands of God," Margaret Ladner, 75, said from the couch of her new living room last week. In this small rural community, as in much of the hurricane-ravaged Mississippi Gulf Coast, this kind of motley charity effort accounts for the vast bulk of what halting progress has been made in the immense task of rebuilding. While the national debate over the recovery has focused on the billions expected in federal aid and insurance, those sources have so far provided little for places such as Pearlington, and charity efforts have constituted more than 80 percent of the home rebuilding completed so far, local and charity officials said. Fewer than one in five families here are back in their homes, but nearly all of them have relied to some extent on charity groups. The waves of volunteers typically come down for a week or two, work during the day and at night sleep on cots and bunks set up in places such as the old school library and huts on the community's football field. "Without the volunteers and the donations, we'd still be in the mud," said Rocky Pullman, a tugboat captain who represents the Pearlington area on the Hancock County Commission. In a county where nearly 11,000 homes were destroyed by the storm, the largest single home rebuilder is the local Habitat for Humanity project, which is undertaking the construction of 19 homes in the area, according to an official with the governor's commission on recovery. Other groups are aiming at similar numbers. The reason for the charity's dominant role in the rebuilding is that little, if any, of the $3.2 billion in federal aid for Mississippi homeowners has reached anyone here -- it is tied up for now at the state level. As for insurance, most residents of this rural community lacked any form of flood policy. People say there just hadn't been a flood in recent memory, and of those who did have coverage, most had too little. "If it wasn't for the good American citizens coming here, we'd be in a world of hurt," said Chuck Benvenutti, Hancock County representative on the Governor's Commission on Recovery, Rebuilding, Renewal. The fact that now, 17 months after Hurricane Katrina, only a small fraction of the home rebuilding has been completed and that most of it has been done by charity groups is viewed here as both wonderful and disappointing -- wonderful that so many strangers have arrived to help, but disappointing that the federal aid and insurance payouts have proved, for now, so unavailable. The charitable groups and residents also say they sometimes worry that as the rest of the country forgets about their plight, the flow of volunteers that they have relied upon could shrink. Several expressed outrage that there was no mention of the hurricane recovery in President Bush's State of the Union address on Tuesday. "We still look like a bomb hit us, and then the president in his national address doesn't even mention us?" said Larry Randall, a retired boat captain and a coordinator of relief efforts at the Pearlington Recovery Center. "That really hurt." Katrina made a nearly direct hit on this modest community, which once had about 1,700 people, about 77 percent of them white, about 20 percent black, census figures show. Most maintained houses -- a typical one sold for about $50,000 before the storm -- and the rest had mobile homes. Katrina pushed ashore a surge of water that simply washed many homes away and filled others with as much as 10 feet of water, according to recovery officials. Eight local people died. Several rode out the storm by climbing tall trees and resting in their branches; others jumped from rooftops into boats. Now the vast majority of the residents who have returned live in FEMA trailers, the skinny, 27-foot-long homes on wheels provided by the Federal Emergency Management Agency that house families in cramped quarters. Along the woodsy roadsides, hand-painted plywood signs offer community encouragement -- "Keep Hope Alive" and "Katrina Was Big, God Was Bigger." Stray dogs roam. Every week, scores of volunteers descend on this community to fill the cots at the school library or the parsonage at the local Baptist Church or a camp run by Presbyterians. Last week there were more than 80 here, but at other times there have been as many as 200. By day, they go out in work crews, framing houses, putting up drywall, installing doors. At night, some have prayer meetings. This past week, at various sites one could run into Amish from Pennsylvania, Catholics from Massachusetts, Methodists from Illinois, Baptists from Mississippi and a Florida church group. The Amish crews, clad in their distinctive suspenders and wide-brimmed hats, have a non-Amish driver who takes them to work sites. "Many of us were born with a hammer in our hands," said Sam Stoltzfus, 41, part of an Amish crew from the Williamsport, Pa., area. "This is fun. Yes, we're supposed to help people, but it's not like a chain around our necks." Russell Geeraerts, 38, a general contractor from Helena, Mont., said he came down after the hurricane "for all the wrong reasons." He was going to volunteer for a couple of weeks and then come back with his own work crew to make some money. "But then I asked myself, 'How could you?' " he said last week after lunch at a local kitchen, which like the various camps was set up to serve volunteers. "Just look at this place." The $3.2 billion in federal aid disbursed by the Mississippi program has largely been untouchable by people in Pearlington. The program's first phase doles out money to people who were flooded but did not live in the federally designated flood zone. Most people in Pearlington live in the flood zone and must wait for the second phase to begin. Under its guidelines, families of low and moderate income will be eligible for as much as $100,000, less any insurance and FEMA rebuilding payments they have received. In the meantime, not knowing whether they will receive aid, many families here say they have accepted, sometimes reluctantly, the help of the charity groups in the rebuilding. Many put what they have into building a foundation, getting the home started. Then the charitable groups, which provide materials and work crews, do the rest. Even so, many feel uncomfortable about receiving the help. Frank Bello and his wife, for example, are raising five children. He worked in maintenance at the local elementary school. She is a nurse. Last week, an Amish crew was putting together the frame on a new house for the family. Just before Christmas, when Bello was hauling three loads of dirt to his home site, it began to rain. He told the volunteer work crew that he was sorry that they had to work in such conditions. "They said, 'Don't worry, we're glad to do it,' and that made me feel better," Bello sa